Yes, yes, a weak currency is good for exports. Granted.
But a currency that becomes a one-way bet is not what a stable bond market makes. If you are spending “a trillion” dollars to stabilize European bond markets, you can not let the currency fall off a cliff. A falling currency sparks inflation fears and prompts investors to demand higher interest rates.
To my mind, you cannot stabilize bond markets in Greece, Portugal, Spain, etc, without making the euro a two-way street.
I think policymakers are looking at similar factors…
